When faced with potential employee organizing activity, some employers react by trying to address worker grievances through alternatives to union representation. Sometimes these approaches involve establishing an internal employee committee designated to bring such grievances to management’s attention. Even companies not facing active organizing will form such committees for the purpose of negotiating and addressing work issues. Last week, the District of Columbia Circuit Court of Appeals reminded employers that such “company unions” can violate federal labor law.

The case involved T-Mobile call center employees who were the subject of organizing activity by the Communications Workers of America. T-Mobile established a program under which it designated and paid certain employees to receive and bring employee complaints to management. The union filed an unfair labor practice charge with the National Labor Relations Board alleging that this program violated statutory prohibitions against labor organizations “dominated” by the employer. An administrative law judge agreed with the union, but the NLRB reversed this decision. This led to an appeal by the union to the D.C. Circuit. That court in turn remanded the case to the NLRB for consideration of the complaint under the appropriate legal standard. The NLRB then found in favor of the union and T-Mobile appealed this second decision to the appellate court.

The question before the D.C. Circuit was whether T-Mobile’s complaint procedure constituted a prohibited labor organization. Even though employees individually submitted grievances to the representatives and then to management, the NLRB held that the law prohibiting employer-dominated organizations applies beyond committees that provide group proposals to management. The employee representative arrangement is a dominated labor organization because it brought complaints regarding terms and conditions of employment to management’s attention for consideration.

Employers faced with labor organizing activity or those hoping to generally improve employee relations should directly deal with employee grievances on an individual basis. By establishing internal committees to deal with such issues and represent employee interests, the company could find itself accused of violating federal labor law requirements.

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